Suppose medical research provides evidence that eating bananas provides far greater health benefits than was previously thought. The resulting increase in the demand for bananas

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Quizplus · Accepted Answer

An increase in demand for bananas would lead to an increase in the value of the marginal product of banana pickers for any given number of banana pickers, as producers are able to charge a higher price for their product. This would also provide an incentive for producers to increase the supply of bananas, which could potentially lead to an increase in the demand for banana pickers and an increase in their marginal product as well. However, the statement that the increase in the demand for bananas increases the marginal product of banana pickers for any given number of pickers is not necessarily true as it depends on the level of substitution possibilities for labor in the production process.

Suppose Medical Research Provides Evidence That Eating Bananas Provides Far